Mendez v. Wright, Finlay & Zak, LLP

This
case is one of three consolidated cases arising out of the
foreclosure of a residential investment property. Pending
before the Court are a motion to reopen the case, a motion
for judgment, and a motion for summary judgment.

I.
FACTS AND PROCEDURAL HISTORY

Plaintiff
Irma Mendez purchased an investment property in North Las
Vegas, Nevada (“the Property”) for $315, 000,
giving the lender a promissory note for $252, 792 and a deed
of trust (“the DOT”) against the Property. Alessi
& Koenig, LLC (“A&K”), on behalf of
Fiesta Del Notre Homeowners Association (“the
HOA”), sold the Property to Absolute Business
Solutions, Inc. (“ABS”) under Nevada Revised
Statutes (“NRS”) Chapter 116. Plaintiff sued
A&K, the HOA, Complete Association Management Co., LLC,
ABS, and Amir Hujjuttallah in this Court in pro se
on eight causes of action (“the ‘314
Case”). After several amendments and pretrial motions,
most of the claims in the ‘314 Case have been
adjudicated. ABS separately brought a quiet title action for
a declaration of the extinguishment of the DOT via the
Chapter 116 sale (“the ‘1325 Case”). The
Federal National Mortgage Association (“Fannie
Mae”) and the Federal Housing Finance Agency intervened
in the ‘1325 Case, and the Court granted them summary
judgment, ruling that the DOT survived the Chapter 116 sale
under Bourne Valley Court Trust v. Wells Fargo Bank,
NA, 832 F.3d 1154 (9th Cir. 2016).

The
present case is a quiet title action brought by Plaintiff
that listed several other statutory and common law torts. The
Court granted several motions to dismiss and closed the case
when Defendants informed the Court at a recent status
conference (which Plaintiff did not attend) that no claims
remained. Plaintiff has filed motions to reconsider and for
summary judgment, arguing that she was unable to attend the
status conference due to a family emergency and that the
claims for quiet title and slander of title remain against
Joel and Sandra Stokes, trustees of the Jimijack Irrevocable
Trust (“the Trust Defendants”). Three Defendants
have moved for entry of judgment.

II.
DISCUSSION

Plaintiff
argues that a family emergency prevented her from attending
the August 9, 2017 status conference, and that her claim to
quiet title against the Trust Defendants has not been
adjudicated. Plaintiff claims her husband was in the
emergency room several days prior to the hearing. Plaintiff
claims she contacted the courtroom deputy to report her
inability to appear. Plaintiff filed a notice in the
‘314 Case on August 8, 2017 (ECF No. 186) indicating
that her husband had been admitted to the hospital in San
Diego on August 6, 2017 and requesting a continuance. But
despite three days between her husband's admittance and
the hearing, Plaintiff did not seek to appear telephonically,
an option the Court routinely grants. Plaintiff herself
appeared telephonically before the Magistrate Judge in
January 2017 in the ‘1325 Case, so she cannot claim to
have been unaware of that option. But she did not request it,
and the Court granted no continuance.

District
courts have the inherent power to control their dockets and
“[i]n the exercise of that power, they may impose
sanctions including, where appropriate . . . dismissal”
of a case. Thompson v. Hous. Auth. of City of L.A.,
782 F.2d 829, 831 (9th Cir. 1986). A court may dismiss an
action, with prejudice, based on a party's failure to
prosecute an action, failure to obey a court order, or
failure to comply with local rules. See Ghazali v.
Moran, 46 F.3d 52, 53- 54 (9th Cir. 1995) (dismissal for
noncompliance with local rule); Ferdik v. Bonzelet,
963 F.2d 1258, 1260-61 (9th Cir. 1992) (dismissal for failure
to comply with an order requiring amendment of complaint);
Carey v. King, 856 F.2d 1439, 1440-41 (9th Cir.
1988) (dismissal for failure to comply with local rule
requiring pro se plaintiffs to keep court apprised of
address); Malone v. U.S. Postal Service, 833 F.2d
128, 130 (9th Cir. 1987) (dismissal for failure to comply
with court order); Henderson v. Duncan, 779 F.2d
1421, 1424 (9th Cir. 1986) (dismissal for lack of prosecution
and failure to comply with local rules).

In
determining whether to dismiss an action for lack of
prosecution, failure to obey a court order, or failure to
comply with local rules, the court must consider several
factors: (1) the public's interest in expeditious
resolution of litigation; (2) the court's need to manage
its docket; (3) the risk of prejudice to the defendants; (4)
the public policy favoring disposition of cases on their
merits; and (5) the availability of less drastic
alternatives. Thompson, 782 F.2d at 831;
Henderson, 779 F.2d at 1423-24; Malone, 833
F.2d at 130; Ferdik, 963 F.2d at 1260-61;
Ghazali, 46 F.3d at 53.

Here,
the Court finds that the first two factors-the public's
interest in expeditiously resolving this litigation and the
Court's interest in managing the docket-weigh in favor of
not reopening the case. These three related cases have been
ongoing for over two years. Two of the cases involve quiet
title actions as to the same Property, and it is in the
public interest to resolve the title to the Property
expeditiously for the sake of potential buyers, lenders,
renters, etc. The third factor-risk of prejudice to
Defendants-weighs strongly in favor of not reopening the
case, because the case will cloud the title for potential
sale or lease of real property at issue while it remains
open. The fourth factor-public policy favoring disposition of
cases on their merits- is greatly outweighed by the factors
favoring dismissal. In any case, the fourth factor is not
prominent in this case, where the quiet title claim against
the Trust Defendants is likely subject to dismissal for
failure to state a claim. The Amended Complaint does not make
allegations plausibly indicating any defect in the sale to
Trust Defendants under state law, which would be the only
basis for victory on that claim. (See Am. Compl.
8-12, ECF No. 65). Fifth, the Court must consider whether
there is a less drastic sanction than to refuse to reopen the
case. As noted supra, Plaintiff had adequate warning
of the hearing and had previously taken advantage of the
opportunity to appear telephonically. But she made no such
request this time despite knowing of her potential inability
to appear in person three days before the hearing. The Court
might consider awarding the fees associated with the
appearance of Defendants' counsel as an alternative
sanction, but that would not ameliorate the prejudice to the
Trust Defendants of having the cloud to their title restored.
Especially considering the weakness of the quiet title claim,
that would be inequitable.

Next,
the Court denies as moot Wright, Finlay & Zak, LLP's,
Seterus, Inc.'s, and Fannie Mae's joint motion for
entry of final judgment under Rule 54(b) and will order the
Clerk to enter final judgment in the case. Finally, the Court
notes that it would deny Plaintiffs motion for offensive
summary judgment against the Trust Defendants even if the
Court were to reopen the case. Plaintiff argues that the
Court's ruling in the ‘1325 Case entitles her to a
declaration that the foreclosure sale was null and void and
that title to the Property should be restored to her. But the
Court's ruling in the ‘1325 Case that the DOT
survived the HOA sale does not imply that remedy. The Court
ruled that the DOT survived the Chapter 116 sale because of
the constitutional infirmity of the opt-in notice scheme. The
Court did not rule that the foreclosure sale was altogether
void such that Plaintiff s title should be restored. That
might be a remedy if the foreclosure did not conform to state
law, but Plaintiff adduces no such evidence. Indeed, as the
Court has noted, the Amended Complaint does not even make out
a plausible prima facie claim to that effect. Also, the
motion is untimely under the Scheduling Order.

CONCLUSION

IT IS
HEREBY ORDERED that the Motion to Reopen Case (ECF No. 74)
and the Motion for ...

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